The “Football Leaks” focus shifts to clubs with Middle Eastern owners
Ongoing controversy continues to surround the “Beautiful Game” as some 70 million documents (3.4 terabytes of data), remain the subject of investigation by journalists from members of European Investigative Collaborations (EIC).
The current report of the investigation relates to possible financial fraud in relation to the Financial Fair Play rule of the Union of European Football Associations (UEFA). This rule, approved in 2010, aims to prevent professional football clubs from spending more than they earn in the pursuit of success. The aim is to prevent clubs from doing this and then getting into financial difficulties that could endanger their long-term survival.
In December 2016 findings from the first files disclosed how some of football’s most prominent figures, including Cristiano Ronaldo and José Mourinho, avoided tax on some earnings through their use of offshore accounts. Since then, both European and national regulators have been questioning representatives of European football bodies about their tax structures.
The latest information released concentrates on the activities of Middle Eastern individuals and organisations who have become increasingly influential in football. So far they have focused on Manchester City, owned by Sheikh Mansour, deputy-prime minister of the UAE, and Paris St Germain, which belongs to Qatar Sports Investments.
The documents raise questions about the arrangements between these clubs and the football authorities regarding sponsorship deals and Financial Fair Play. They suggest the authorities may have dealt unevenly with the application of the sport’s rules, making it difficult for club owners to navigate these already complex regulations.
The investigators say that they will also be turning the spotlight on tax avoidance arrangements entered into by clubs and players.
JHA is a leading authority in contentious tax and commercial litigation, having achieved Band One rankings in both Legal 500 and Chambers & Partners for the fifth consecutive year. A significant part of its practice is devoted to football-related tax disputes involving clubs, players and agents.
The DBKAG & K (CJEU) decision: an opportunity for investment funds?
On 17 June 2021, the European Court decided the joint cases K (C-58/20) and DBKAG (C-59/20) regarding whether the supply of certain services constituted the “management of special investment funds”, benefiting from the VAT exemption enshrined in Article 135(1)(g) of Council Directive 2006/112/EC.
Raising the bar: UK Supreme Court clarifies the requirements for HMRC to issue Follower Notices
On 2 July 2021, the Supreme Court delivered its judgment in R (on the application of Haworth) v HMRC  UKSC 25, finding unanimously in favour of the taxpayer and upholding the Court of Appeal’s decision to quash the follower notice issued to him.
The Danish Supreme Court decides the Fidelity case
The Fidelity case concerned claims brough by three undertakings for collective investment in transferable securities (UCITS) for the repayment of Danish withholding tax on dividends received from companies resident in Denmark between 2000 and 2009. The Supreme Court rejected the claims on the grounds that the Fidelity UCITS did not fulfil the conditions for the exemption provided by Danish law.
A yellow card for footballers and their agents……let’s bring in another match official
There has been long running tension between HMRC and the way that footballers and their agents are remunerated. As the Professional Footballers’ Association wade into the debate, Helen McGhee discusses the problems arising from agents’ fees and image rights.